Samurai Bond Market: LatAm Issuers Return

Mar 3, 2010

Sovereigns have returned to Japan for diversification at an attractive rate. Corporates are another matter and the scope of the Samurai market remains to be seen.

by Ben
Miller

Tapped often in the 1990s, the
Japanese investor base shied away from Latin American risk
after being burned by the Argentine default of late 2001. After
another more global credit crisis, which reminded investors
that the developed markets are also risky and directed
attention to stronger EM borrowers, the Samurai market may be
ripe for the plucking.

After years of almost no activity from the region, two of its
more reputable borrowers, Mexico and Colombia, locked up
sizeable funds in late 2009. Both took advantage of 95%
guarantees from the Japan Bank for International Cooperation
(JBIC), under a program the multilateral developed to assist EM
borrowers.

"We want to reestablish our presence in the Japanese
market," says Gerardo Rodríguez, Mexicos deputy
undersecretary for public credit, after placing one of the
largest non-dollar EM bonds last year, at nearly $1.7 billion
equivalent. "We are looking forward to...